Why Is Xerox (XRX) Down 3.1% Since Last Earnings Report?

Core Viewpoint - Xerox Holdings Corporation reported disappointing first-quarter 2024 results, with both earnings and revenues missing consensus estimates, leading to a negative trend in stock performance [2][9]. Financial Performance - Adjusted EPS for Q1 2024 was 6 cents, missing the Zacks Consensus Estimate by 84.2% and declining over 87.8% year-over-year [2]. - Total revenues were $1.5 billion, missing the consensus mark by 4.8% and decreasing 12.4% year-over-year on a reported basis [2]. - Post-sale revenues were $1.2 billion, down 8.5% year-over-year, primarily due to reductions in lower-margin products and geographic simplification [3]. - Equipment sales fell 25.8% year-over-year to $290 million, attributed to backlog reduction and geographic simplification [3]. - Print and Other segment revenues totaled $1.43 billion, down 12.6% year-over-year [3]. - Services, maintenance, and rental revenues were $937 million, down 6.7% year-over-year [4]. Operating Performance - Adjusted operating income was $33 million, down 72% year-over-year, with an adjusted operating margin of 2.2%, up 470 basis points year-over-year [5]. Balance Sheet and Cash Flow - Xerox ended the quarter with cash and cash equivalents of $685 million, an increase from $519 million in the previous quarter [6]. - Operating cash outflow was $79 million, and free cash outflow was $89 million for the quarter [6]. 2024 Guidance - The company expects 2024 revenues to decline by 3% to 5% on a constant currency basis, with an adjusted operating margin of at least 7.5% and free cash flow of at least $600 million [7]. Market Sentiment - Estimates for Xerox have trended downward, with a consensus estimate shift of -7.14% over the past month [7]. - The stock has an average Growth Score of C and a Momentum Score of D, but a grade of A on the value side, placing it in the top quintile for this investment strategy [8]. - Xerox currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of below-average returns in the coming months [9].